NUPRC, NMDPRA in Hot Waters as Audit Detects Unexplained N313 Billion
- An audit report from the Office of the Auditor General of Nigeria has uncovered unaccounted sums in the NUPRC and NMDPRA
- The two regulatory bodies have no explanation pegged to these monies, which include outstanding royalties from the NNPCL to DPR
- The NUPRC responded that some of the sums have been remitted, and it is still making efforts with the NNPC to refund the rest
Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) may find themselves in a serious mess over their failure to account for N313 billion.
An audit report by the Auditor General of the Federation finds that both agencies have compromised accountability standards in their regulatory actions, costing the government over N313 billion in revenue loss.
The latest report by the Auditor General observed that N309 billion and $2.28 billion, which fall under the regulatory bodies, are unaccounted for in the 2021 financial year.
Source: UGC
These sums include outstanding royalties, irregular balances in marketers' debt records, and outstanding royalties.
Interim observations highlight that even where explanations are given, they are untenable to justify the transactions.
PREMIUM TIMES reports that these transactions happened under the Pioneer Chief Executive Officers of both agencies, Mr. Gbenga Komolafe of the NUPRC and Farouk Ahmed of the NMDPRA, both of whom were appointed by President Muhammadu Buhari in September 2021 and still hold the positions.
Breakdown of the outstanding royalties
The report uncovered about $1.65 billion in outstanding Royalties payable by the Nigerian National Petroleum Corporation Limited (NNPCL) to the Department of Petroleum Resources (DPR) CBN account for Production Sharing Contracts (PSC), Repayment Agreements (RA), and Modified Carry Arrangement (MCA) liftings as of December 31, 2021.
Of this sum, DPR received $1.4 billion, with the remaining $254 million left outstanding with no explanations.
This infraction runs afoul of Paragraph 227 (i) of the Financial Regulation (FR), which mandates the accounting officers to follow up uncollected revenuers and furnish a return of arrears of revenues due and ensure collection.
Where it is no longer possible, the same accounting officers are to write to the Ministry of Finance to approve a write-off.
This oversight has caused the federal government a significant loss of revenue in the 2021 financial year.
NUPRC's response
In its response to the query, NUPRC says that it has recovered almost all of the $254 million. It noted that as at December 31, 2021, $224 million had been paid, leaving an outstanding balance of $29.6 million.
NUPRC management says efforts are ongoing to ensure that the NNPCL remits the balance. However, the auditors insist that the issue is unresolved as there are still uncollected sums.
The recommendation is that the regulator recover all sums and ensure they are remitted to the Federation Account.
NNPC with N514 billion unaccounted
In related news, Legit.ng recently reported that the same audit report uncovered a financial mess in NNPC 2021 financial year.
NNPC spent several sums without authorisation, amounting to N514 billion. This included a massive deduction of over N83 billion from monies remitted to the federation's account.
There were also irregular deductions from domestic crude sales at source, amounting to N343.64 billion.
The report recommended that GCEO Mele Kyari be summoned to explain the spending and face sanctions.
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Source: Legit.ng
